Valley Liquors, Inc. v. Renfield Importers, Ltd.

• Decision Date: 13 July 1987
• Docket Number: No. 86-1040,86-1040
• Citation: 822 F.2d 656
• Parties: 1987-1 Trade Cases 67,589 VALLEY LIQUORS, INC., an Illinois Corporation, Plaintiff-Appellant, v. RENFIELD IMPORTERS, LTD., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 656

822 F.2d 656

1987-1 Trade Cases 67,589

VALLEY LIQUORS, INC., an Illinois Corporation, Plaintiff-Appellant, v. RENFIELD IMPORTERS, LTD., Defendant-Appellee.

No. 86-1040.

United States Court of Appeals Seventh Circuit.

Argued Sept. 18, 1986.

Decided June 3, 1987.

Rehearing and Rehearing In Banc Denied July 13, 1987.

Richard J. Prendergast, Richard J. Pendergast, Ltd., Chicago, Ill., for plaintiff-appellant.

Morton Siegel, Siegel, Moses & Schoenstadt, Chicago, Ill., for defendant-appellee.

Before WOOD, COFFEY and RIPPLE, Circuit Judges.

HARLINGTON WOOD, Jr., Circuit Judge.

Valley Liquors, Inc. ("Valley"), an Illinois corporation, appeals from a district court order granting summary judgment in favor of defendant Renfield Importers, Ltd. ("Renfield"). Specifically, Valley contends that the district court erred in granting summary judgment for Renfield on Valley's claims that Renfield and others had conspired to fix prices in violation of the Sherman Antitrust Act, 15 U.S.C. Sec. 1 (1982) (Count I), that Renfield's decision to terminate Valley in three counties unreasonably restrained trade, also in violation of 15 U.S.C. Sec. 1 (Count II), and that Renfield breached its distributorship agreement with Valley (Count III). We affirm the district court's judgment as to all three counts.

I. FACTUAL BACKGROUND

Valley Liquors, Inc. is a wholesale distributor of alcoholic beverages. Renfield Importers, Ltd. is an importer and national distributor of various brands of distilled spirits and wines, including Gordon's Vodka, Gordon's Gin, and Giacobazzi wine. Before November 1, 1981, Valley had been one of Renfield's distributors for over twenty-six years, having a territory throughout Illinois. The majority of Valley's sales for Renfield took place in the northern Illinois counties of McHenry and DuPage, and portions of Cook County. Other Renfield distributors in those counties, and thus Valley's competitors, were Romano Brothers Beverage Company ("Romano") and Continental Distributing Company, Inc. ("Continental").

In July 1981, Renfield met separately with Valley, Romano, and Continental, and suggested that it was contemplating a realignment of its entire Illinois distributorship network. In October 1981, Renfield informed its distributors of its changes. Renfield told Romano that it would gain the right to sell Gordon's Vodka and Henkell Sparkling Wines and would become the exclusive distributor of Renfield's Sonoma Wines, but that it would lose its exclusive distributorship of Giacobazzi wines. Renfield told Continental it would no longer have the right to serve as exclusive distributor of Gordon's Vodka in Cook County and would not distribute Renfield's Piper Heidseick Champagne, Henkell Sparkling Wines and Sonoma Wines. Both Romano and Continental were initially angry and upset over the changes in their rights, but after meetings with Renfield decided to accept the realignment. Renfield then advised Valley on October 22 that it would be eliminating Valley effective November 1, 1981, as Renfield distributor in DuPage, McHenry, and Cook counties. Valley would, however, retain the exclusive right to distribute Renfield's products in the counties of Will, Winnebago, Carroll, Boone, Bureau, and Whiteside; and would have the dual right to distribute Renfield's products in DeKalb, Kane, and Kendall counties.

Valley brought suit against Renfield on November 10, 1981, alleging that Renfield had breached its contract with Valley by terminating Valley in bad faith and had violated the Sherman Act, 15 U.S.C. Sec. 1 (1982), in two respects--by conspiring with others to fix prices and by unreasonably restraining trade in terminating Valley as distributor in three Illinois counties. Valley also filed a contemporaneous motion for a temporary restraining order and preliminary injunction. After conducting a hearing, the district court on November 17, 1981, denied Valley's motion for preliminary injunction. Valley appealed, and this court affirmed. ¹ Valley Liquors, Inc. v. Renfield Importers, Ltd., 678 F.2d 742 (7th Cir.1982) (Valley I ).

Renfield subsequently filed a motion for summary judgment. The parties proceeded with discovery. Valley filed an amended complaint, and Renfield filed a motion to dismiss Count III of that complaint, a breach of contract claim. The parties continued discovery and filed various materials regarding Renfield's motion for summary judgment.

On December 31, 1985, the district court granted Renfield's motion for summary judgment on all three counts of Valley's amended complaint. ² Valley appeals.

II. ANALYSIS

Valley challenges the district court's grant of summary judgment on each of the three counts of its amended complaint. Our framework for analyzing Valley's contentions regarding the grant of summary judgment is as follows. After Renfield moved for summary judgment, Valley had the responsibility of going beyond the pleadings and setting forth "specific facts showing that there [was] a genuine issue for trial." Fed.R.Civ.P. 56(e); see Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). A grant of summary judgment was then proper if "there [was] no genuine issue as to any material fact and if [Renfield was] entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). We must decide whether the district judge correctly determined that there were no "genuine factual issues that properly [could] be resolved only by a finder of fact because they [could] reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, 477 U.S. 242, 106 S. Ct. 2505, 2511, 91 L.Ed.2d 202 (1986) (emphasis added).

A genuine issue for trial only exists when there is sufficient evidence favoring the nonmovant for a jury to return a verdict for that party. Id. As the Supreme Court has stated, "[i]f the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. (citations omitted). We must not weigh the evidence. ³ See Staren v. American National Bank & Trust Co., 529 F.2d 1257, 1261 (7th Cir.1976). Instead, we must see if the nonmovant's evidence is sufficient. In determining whether evidence is sufficient, we must of necessity consider the substantive evidentiary standard of proof, for example, preponderance of the evidence, that would apply at a trial on the merits. Anderson, 106 S. Ct. at 2512. In addition, we draw all inferences in favor of the nonmovant. Bartman v. Allis-Chalmers Corp., 799 F.2d 311, 312 (7th Cir.1986); Rodeo v. Gillman, 787 F.2d 1175, 1177 (7th Cir.1986). Such inferences, however, must be "justifiable." Anderson, 106 S.Ct., at 2513; see Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970); Bartman, 799 F.2d at 312-13; Matthews v. Allis-Chalmers, 769 F.2d 1215, 1218 (7th Cir.1985).

Thus we will find that the district court properly granted summary judgment for Renfield on each of the three counts of Valley's amended complaint if we determine that there was no genuine issue of material fact for trial, which turns on our decision that there was insufficient evidence, taking into account the evidentiary standard of proof and drawing all reasonable inferences in Valley's favor, to allow a rational jury to decide for Valley. ⁴

A. Count I--Conspiracy

Valley argues that the district court improperly granted summary judgment on Valley's claim that Renfield conspired with Romano and Continental to fix prices, conduct that is illegal per se under the Sherman Antitrust Act, 15 U.S.C. Sec. 1 (1982). ⁵

Although our summary judgment analysis employs the above legal framework, when analyzing a section 1 conspiracy claim, we apply the standard established in Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984), and reaffirmed in Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). The inferences drawn from underlying facts must be viewed in the light most favorable to the nonmovant, but "antitrust law limits the range of permissible inferences from ambiguous evidence in a [section] 1 case." Id. at 1357. The Matsushita court reaffirmed its holding in Monsanto that "conduct as consistent with permissible competition as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy." Id.; see id. at 1362 n. 21. "[A] plaintiff seeking damages for a violation of [section] 1 must present evidence 'that tends to exclude the possibility' that the alleged conspirators acted independently." Id. at 1357 (quoting Monsanto, 465 U.S. at 764, 104 S.Ct. at 1471). In other words, to successfully contest a motion for summary judgment, the plaintiff "must show that the inference of conspiracy is reasonable in light of the competing inferences of independent action." Id. This is the standard Judge Posner appears to have articulated in Valley I, 678 F.2d at 744, when he stated, "[i]t is therefore not enough to show that Continental and Romano, acting separately ... wanted to get rid of a competitor; there must also be evidence that in terminating Valley Renfield was acceding to their desire rather than acting to promote an independent conception of its self-interest."

Valley fails on this essential point because it has not provided evidence tending to exclude the possibility that Renfield acted independently, or that would show that the inference of conspiracy to fix prices is reasonable in light of the competing inference of independent action. Valley has not proffered any direct evidence that would show that the separate meetings between Renfield and Romano and Continental were conspiratorial, or that would suggest that these meetings were anything other than unilateral notifications of Renfield's realignment plans. Neither is there any evidence that Continental and Romano, or Renfield, for that matter, communicated with each other at those...